Draft National Deep Tech Startup Policy

The Principal Scientific Adviser to the Government of India has put out a draft National Deep Tech Startup Policy (NDTSP) for public comment.

Highlights of the draft:

• Objective: The policy seeks to “ensure India’s position in the global deep tech value chain,” in areas such as semiconductors, Artificial Intelligence (AI) and space tech.
• The policy also includes resource-intensive policy approaches to attract global talent, such as offering networking opportunities to international deep tech startups and experts interested in relocating and contributing to the local ecosystem.
• The policy seeks to bolster research and development in deep tech start-ups, which work on fundamental and technical problems, unlike firms that monetise technology with distinguished business models.
• The policy also seeks to find approaches to provide financing to deep tech start-ups at critical moments, such as before they go to market with their products or ideas.
• The policy seeks to simplify the intellectual property regime for such start-ups, ease regulatory requirements, and proposes a slew of measures to promote these firms.

What is Deep Tech?

• Deep tech or deep technology refers to a class of startup businesses that develop new offerings based on tangible engineering innovation or scientific discoveries and
• Usually, such startups operate on, but are not limited to, agriculture, life sciences, chemistry, aerospace and green energy.
• Deep tech fields like Artificial Intelligence, advanced materials, blockchain, biotechnology, robotics, drones, photonics, and quantum computing are moving more and more quickly from early research to market applications.

State of India’s Deep Tech Startups:

• India had over 3,000 deep-tech start-ups, dabbling in new-age technologies like Artificial Intelligence, Machine Learning (ML), Internet of Things, Big Data, quantum computing, robotics, etc., at the end of 2021.
• According to NASSCOM, deep-tech start-ups in India raised USD 2.7 billion in venture funding in 2021, and now account for over 12% of the country’s overall startup ecosystem.
• In the last decade India’s deep tech ecosystem has grown 53% and is at par with that in developed markets like the US, China, Israel, and Europe.
• Bengaluru accounts for 25-30% of India’s deep-tech start-ups, followed by Delhi-NCR (15-20%) and Mumbai (10-12%).
• Deep-tech start-ups are making their presence felt across sectors like drone delivery and cold chain management to climate action and clean energy.

Present challenges:

• Scale and Time Challenge: To build actual business applications and transfer them from the lab to the market, it takes concerted R&D.
• Marketing: Failure to collect adequate market intelligence, improper use of that information, and insufficient data on overseas markets are all marketing issues.
• Lack of Capital: Because DeepTech firms require more capital than ordinary tech startups, one of the most significant barriers to commercialization is funding.
• Furthermore, because deep technology involves previously unknown mechanics and algorithms, investors are hesitant to support such early-stage systems because they lack the knowledge to assess the new technologies’ potential worth.
• Cultural and Industrial Challenges: Biotech firms in Asia, for example, face numerous obstacles from the government as a result of stringent laws, as this technology raises issues about biosafety, food safety, and ethics.

Government Interventions:

• The Atal New India Challenge: It has been launched under the Atal Innovation Mission (AIM) of the NITI Aayog, with an objective to serve as a platform for the promotion of Innovation Hubs, Grand Challenges, startup businesses, and other self-employment activities, particularly in technology-driven areas.
• NASSCOM's Deep Tech Club (DTC) 2.0: This scheme is aimed at scaling the impact to over 1,000 firms that are leveraging technologies such as AI, ML, Internet of Things, robotics, and blockchain.

Way forward:

• The policy calls for a more multi-pronged approach to protect Indian interests.
• The need of the hour is a coordinated, comprehensive push to optimally engage with international partners and multilateral institutions to push the Indian Deep Tech Ecosystem.